What changed in this filing

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Item 1A. Risk Factors

2025-03-06 compared with 2024-02-29 · 120 added, 101 removed, 224 unchanged (50% of the section changed)

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In addition, the effects of any geopolitical conflict could heighten many of the other known risks described in this Item 1A—Risk Factors.

We are subject to risks associated with epidemics and pandemics, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Our global operations expose us to risks associated with public health crises, including epidemics and pandemics, which may generate significant volatility, uncertainty and economic disruption in many markets in which we or our customers do business.

Over the past several years, COVID-19 adversely impacted our business and financial condition in various ways, including increased operating costs due to social distancing and other strict health and safety protocols implemented at our facilities to protect employees and contractors, reductions and unpredictable fluctuations in demand and reduced supply chain reliability due to international shipping congestion and the pandemic’s adverse impact on our suppliers, vendors and other global supply chain partners, which impaired our ability to timely and efficiently move our products through the various steps in the global supply chain process to our end customers.

The businesses we operate are highly competitive and many of them are cyclical, which may result in fluctuations in pricing and volume that can materially adversely affect our business, financial condition, results of operations and cash flows.

Competition, demand fluctuations and cyclicality are the most significant drivers of sales volumes and pricing for our products.

Competition, demand fluctuations and cyclicality are our products’ most significant drivers of sales volumes and pricing.

We face significant competition from domestic and foreign producers in all of our businesses.

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Likewise, certain cellulose specialty grade volumes have declined meaningfully in recent years due to these factors.

Our high-purity commodity products for viscose and absorbent materials applications were also at extremely low pricing levels in 2019 and 2020 and later rebounded.

Our high-purity commodity products for viscose and fluff applications were also at extremely low pricing levels in 2019 and 2020 and later rebounded.

There can be no assurance as to the duration and magnitude of a rebound or whether elevated levels during any one period can be sustained over a significant period of time.

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Additionally, increased use of e-cigarettes, electronically heated tobacco products and smokeless tobacco products may affect demand for traditional cigarettes.

In addition, some of the industries in which our end-use customers participate, such as publishing, packaging, automotive and textiles, are cyclical in nature, thus posing risks to us which are beyond our control.

These industries are highly competitive and may experience overcapacity and reductions in end-use demand, each of which may affect demand for and pricing of our products.

These industries are highly competitive and may experience overcapacity and reductions in end-use demand, which may affect demand for and pricing of our products.

The consequences of this could include reduction, delay or cancellation of customer orders.

Our high-yield pulp business is cyclical and influenced by a variety of factors, including periods of excess product supply due to industry capacity increases, periods of decreased demand due to reduced economic activity or market conditions, inventory destocking by customers, reduced market prices, scarcity of economically viable fiber in Canada and fluctuations in currency exchange rates.

Our high-yield pulp business is cyclical and influenced by various factors, including periods of excess product supply due to industry capacity increases, periods of decreased demand due to reduced economic activity or market conditions, inventory destocking by customers, reduced market prices, scarcity of economically viable fiber in Canada and fluctuations in currency exchange rates.

These factors may cause significant price changes over a short period.

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In particular, our high-yield pulp business has been the subject of temporary curtailments at various points in recent years in reaction to market conditions.

Our paperboard business has a blend of long- and short-term contracts and has generally been more stable than our high-yield pulp business due to strong ties to and steady demand of the lottery and packaging sectors.

Our paperboard business has a mix of long- and short-term contracts and has generally been more stable than our high-yield pulp business due to its strong ties to and steady demand of the lottery and packaging sectors.

Changes in the availability and price of raw materials and energy and continued inflationary pressure could have a material adverse effect on our business, financial condition and results of operations.

Raw material and energy costs, such as chemicals, oil, natural gas and electricity, are a significant operating expense for us.

Raw material and energy costs, such as wood, chemicals, oil, natural gas and electricity, are a significant operating expense for us.

The cost of these inputs can be volatile and are susceptible to rapid and substantial increases due to factors beyond our control, such as lack of availability, changing economic and weather conditions, political, civil or other unrest or instability in energy-producing nations, and supply and demand considerations.

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Caustic soda, a key manufacturing input in our high purity cellulose business, has historically had significant price volatility.

Similarly, the price of oil and natural gas and their pipeline transportation has historically experienced significant fluctuations based on weather and market demand and other factors.

Similarly, the price of oil and natural gas and their pipeline transportation has historically experienced significant fluctuations based on weather, market demand and other factors.

Additionally, industrial and other policies of the governmental agencies having jurisdiction over the suppliers of raw materials to our facilities may change due to changes in political leadership or otherwise, which also could adversely impact the cost of energy and its transportation.

Deforestation is an increasing concern where the irresponsible harvest of these raw materials can lead to loss of critical forests and habitats.

Sourcing of these materials is under increasing scrutiny due to deforestation, and the availability of these raw materials may be limited in the future.

Given inflation in the broader economy, we monitor the risk that inflation presents to our active and future contracts.

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For example, in 2022, we saw broad-based increases in costs from inflation that are material to our business as a whole, including with respect to key product inputs such as wood, energy, chemicals and transportation.

Mitigation of inflationary impacts to some extent through cost surcharges may not be sufficient and continued inflationary pressure could materially adversely affect our profits and margins under our customer contracts.

Mitigating inflationary impacts through cost surcharges may not be sufficient and continued inflationary pressure could materially adversely affect our profits and margins under our customer contracts.

The impact of raw material and energy pricing increases could materially adversely affect our business, financial condition and results of operations.

We are subject to material risks associated with doing business outside of the U.S.

We have large manufacturing operations in Canada and France and a significant portion of our sales are to customers located outside of the U.S., including China, the European Union, Japan, Canada, South Korea and other international markets.

Sales to customers outside of the U.S.

We have large manufacturing operations in Canada and France and a significant portion of our sales are to customers outside the U.S., including China, Europe, Japan, Canada, South Korea and other international markets.

Sales to customers outside the U.S.

made up 66 percent of our revenue in 2024.

The manufacture and sale of our products in non-U.S.

markets results in risks that are inherent to conducting business under international laws, regulations and customs.

markets result in risks inherent to conducting business under international laws, regulations and customs.

We expect international sales will continue to contribute significantly to our results of operations and future growth.

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Foreign currency exchange fluctuations may have a material adverse impact on our business, financial condition and results of operations.

We have manufacturing operations in the U.S., Canada and France, and we sell our products all over the world, in either USD, CAD or Euros.

We have manufacturing operations in the U.S., Canada and France, and we sell our products worldwide, in either USD, CAD or Euros.

As a result, we are exposed to movements in foreign currency exchange rates and our earnings are affected by changes in the value of the CAD and Euro relative to the USD.

A strengthening of the USD or a weakening of the home currency of the countries in which our international competitors manufacture products can adversely impact our competitive position.

A strengthening of the USD or a weakening of the home currency of the countries where our international competitors manufacture products can adversely impact our competitive position.

In addition to ordinary-course currency fluctuations, specific events have had, and could in the future have, an impact on currency valuation.

Our risk management policy allows management, with oversight from the Audit Committee of our Board of Directors, to hedge a significant portion of our exposure to fluctuations in foreign currency exchange rates, though no hedges are currently in place.

Our risk management policy allows management, with oversight from the Finance and Strategic Planning Committee of our Board of Directors, to hedge a significant portion of our exposure to fluctuations in foreign currency exchange rates, though no hedges are currently in place.

To accomplish this, we have used, and may in the future use, derivative instruments, such as currency options and foreign exchange forward contracts, to mitigate our exposure to fluctuations in foreign currency exchange rates.

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and internationally, could materially adversely affect our ability to access certain markets.

We manufacture our products in the U.S., Canada and France, and sell them in more than 40 countries.

Our financial results are highly dependent on our ability to sell our products globally.

Trade barriers such as tariffs, countervailing and anti-dumping duties, quotas and other similar restrictions on trade have in the past resulted in, and may in the future result in, a material reduction in revenues and profitability.

The effects of such restrictions on trade on our business in China and Canada are set forth below.

We manufacture our products in the U.S., Canada and France, and sell them in over 40 countries.

Our financial results highly depend on our ability to sell our products globally.

Trade barriers such as tariffs, countervailing and anti-dumping duties, quotas and other similar restrictions on trade have historically resulted in, and may in the future result in, a material reduction in revenues and profitability.

For example, the U.S.

government imposed new tariffs on products imported from China in February 2025 and again in March 2025, and from Canada and Mexico in March 2025, which has and may result in additional retaliatory tariffs and other trade actions from these nations.

We cannot predict what additional changes to trade policy may be enacted by the U.S.

government with the previously mentioned countries or additional countries with which we do business, including whether existing tariff policies will be maintained or modified, what products may be subject to such policies or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict at this time the effects that any such changes would have on our business.

The extent to which these changes in the global marketplace affect our business, financial condition and results of operations will depend on the specific details of the changes in trade policies, their timing and duration, as well as our ability to effectively deploy tools to address these issues.

The effects of previous trade restrictions on our business in China and Canada are discussed further below.

In 2024, we had product sales of $352 million shipped to customers in China and, of this amount, $251 million were products manufactured in the U.S.

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tariffs, China imposed a tariff on certain U.S.

product exports, including all wood pulp sold by us from the U.S.

into China, a result of which was a significant decline in operating income for as long as the tariffs remained in place.

Failure of the U.S.

exports, including all wood pulp sold by us from the U.S.

This caused a significant decline in operating income for as long as the tariffs remained in place.

Failure by the U.S.

and Chinese governments to reach acceptable agreements regarding trade, as well as continued trade volatility and additional trade-related actions by the Chinese government, could have a material adverse impact on our business, financial condition and results of operations.

We previously operated six softwood lumber mills in Ontario and Quebec, Canada, and exported softwood lumber into the U.S.

As part of the sale of our lumber assets in August 2021, we retained all rights and obligations to softwood lumber duties generated or incurred through the closing date of the transaction.

and Canada have a history of trade disputes, dating to the early 1980s, related to the export of softwood lumber from Canada into the U.S.

Each dispute has been resolved via agreement or litigation, which generally involved some combination of duties and/or quotas, as well as a return of all or most of the duties previously paid by Canadian softwood lumber producers.

In October 2015, a 10-year Softwood Lumber Agreement between the U.S.

and Canada, which resolved a 2001-2006 lumber dispute between the countries, expired.

No agreement was reached to extend or renew it, and as a result, after a one-year cooling-off period, the U.S.

commenced a dumping investigation of lumber exports from Canada into the U.S.

Beginning in 2017, anti-dumping and countervailing duties were assessed by the USDOC on lumber exported into the U.S.

and we were assigned an anti-dumping duty rate of six percent and a countervailing duty rate of 14 percent.

These duties are being legally challenged by Canada under both the North American Free Trade Agreement and World Trade Organization dispute resolution processes.

Canada has filed an appeal under Chapter 10 of the United States-Mexico-Canada Agreement on Trade to contest these revised duties.

The USDOC has completed administrative reviews of the 2017, 2018, 2019, 2020 and 2021 periods and reduced rates applicable to us to a combined anti-dumping and countervailing duty rate of approximately 8 percent.

Canada has filed an appeal under Chapter 10 of the United States-Mexico-Canada Agreement on Trade to contest these revised duties.

We paid approximately $112 million of softwood lumber duties between 2017 and the August 2021 sale of our lumber assets, including $1 million of ancillary fees, which were recorded as expense in the periods incurred.

As of December 31, 2023 , we had a $40 million long-term receivable associated with the USDOC’s administrative reviews.

This amount does not include interest, which will be due on any amounts refunded.

We estimate that interest earned on the total amount of softwood lumber duties paid will exceed $10 million.

Cash is not expected to return to us until final resolution of the softwood lumber dispute, which remains subject to legal challenges.

No assurances can be given that the duties will be overturned or repaid through the legal process or a negotiated settlement, or that lumber pricing will be sufficient to substantially offset their impact.

In 2024, product sales of $233 million were generated from Canadian exports to the U.S.

and Canada have a history of trade disputes, dating to the early 1980s, in particular, related to the export of softwood lumber from Canada into the U.S.

Each dispute was resolved via agreement or litigation, which generally involved some combination of duties and/or quotas, as well as a return of all or most of the duties previously paid by Canadian softwood lumber producers.

In October 2015, a 10-year softwood lumber agreement expired and no agreement was reached to extend or renew it.

As a result, the U.S.

commenced an investigation of lumber exports from Canada into the U.S.

that resulted in the assessment of duties on lumber exported into the U.S., which Canada continues to challenge on numerous legal fronts.

With the third quarter 2024 sale of our softwood lumber duty refund rights, this dispute is no longer potentially adversely impactful to our business.

However, failure by the U.S.

and Canadian governments to reach acceptable agreements regarding future trade could have a materially adverse impact to our business, financial condition and results of operations.

We are subject to risks associated with epidemics and pandemics, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

Pandemics and epidemics, such as COVID-19, have adversely impacted, and may in the future adversely impact, our business and financial condition in various ways, including increased operating costs due to stricter health and safety protocols implemented at our facilities to protect employees and contractors, reductions and unpredictable fluctuations in demand and reduced supply chain reliability, impairing our ability to timely and efficiently move our products through the various steps in the global supply chain process to our end customers.

Business and Operational Risks

Our ten largest customers represented approximately 40 percent of our 2023 revenue and the loss of all or a substantial portion of our revenue from these customers could have a material adverse effect on our business.

Our ten largest customers represented a significant portion of our 2024 revenue and the loss of all or a substantial portion of our revenue from these customers could have a material adverse effect on our business.

While we are not dependent on any single customer or group of customers and we continue to strive to broaden and diversify our customer base, our ten largest customers accounted for a significant portion, approximately 35 percent , of our 2024 revenue.

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We are also subject to credit risk associated with these customers.

If one or more of our ten largest customers were to become bankrupt, insolvent or otherwise were unable to pay for our products, we may incur significant write-offs that may have a material adverse effect on our business, financial condition and results of operations.

If one or more of our ten largest customers were to become bankrupt, insolvent or otherwise unable to pay for our products, we may incur significant write-offs that could have a material adverse effect on our business, financial condition and results of operations.

A material disruption at any of our manufacturing facilities could prevent us from meeting customer demand, reduce our sales and profitability, increase our cost of production and capital needs, or otherwise materially adversely affect our business, financial condition and results of operations.

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We experienced significant reliability issues during the first quarter of 2019 at our Temiscaming, Quebec plant and during the third quarter of 2021 at our Jesup, Georgia plant.

In the third quarter of 2024, a fire at our Jesup plant impacted operations for two weeks;

• prolonged power interruptions or failures;

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Unfavorable changes in the availability of, and prices for, wood fiber may have a material adverse impact on our business, financial condition and results of operations.

Wood fiber is the largest volume of raw material used in the manufacturing process for virtually all of our products.

Wood fiber is the largest volume raw material used in the manufacturing of virtually all of our products.

Many factors can impact its availability and pricing.

Fiber for our U.S.

and France facilities is primarily harvested from privately-held lands, while fiber for our Canadian facilities is primarily harvested from lands owned or controlled by the governments of the provinces of Ontario and Quebec, referred to as “Crown Lands.” In connection with the sale of our lumber and newsprint assets in August 2021, we transferred agreements with provincial authorities, which granted timber “tenures” for terms varying from five to 20 years, to a third party.

and France facilities is primarily harvested from privately-held lands, while fiber for our Canadian facilities is harvested mainly from lands owned or controlled by the governments of the provinces of Ontario and Quebec, referred to as “Crown Lands.” In connection with the sale of our lumber and newsprint assets in August 2021, we transferred agreements with provincial authorities, which granted timber “tenures” for terms varying from five to 20 years, to a third party.

Concurrent with the transaction, we entered into a 20-year assignable wood chip and residual fiber supply agreement with the buyer of those assets, securing supply for our operations at the Temiscaming plant.

There can be no assurance that, upon termination of this wood chip and residual fiber supply agreement due to its natural expiration or otherwise, this agreement will be renewed, extended or replaced in the future on acceptable terms, or at all.

There can be no assurance that, upon the termination of this wood chip and residual fiber supply agreement due to its natural expiration or otherwise, this agreement will be renewed, extended or replaced in the future on acceptable terms, or at all.

Regulatory developments and environmental litigation also have caused, and may cause in the future, significant reductions in the amount of timber available for commercial harvest from non-Crown Lands in Canada and privately-owned lands in the U.S.

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A significant reduction in the availability of contractors experienced in harvesting and transporting logs could impact wood fiber supply, pricing and availability.

Wood fiber supply and pricing may also be impacted by the proximity between available experienced logging and fiber transportation contractors and our manufacturing facilities.

The proximity between available experienced logging and fiber transportation contractors and our manufacturing facilities may also impact wood fiber supply and pricing.

Sourcing wood fiber from greater distances could result in increased transportation costs.

Finally, natural conditions, including prolonged wet or cold or other weather events, timber growth cycles and restrictions on access to timberlands for harvesting, may also limit the availability, and increase the price, of wood, as may other factors, including damage by fire, insect infestation, disease, prolonged drought and natural disasters (including those as a result of climate change) such as windstorms and hurricanes.

Further, natural conditions, including prolonged wet or cold or other weather events, timber growth cycles and restrictions on access to timberlands for harvesting, may also limit the availability and increase the price of wood, as may other factors, including damage by fire, insect infestation, disease, prolonged drought and natural disasters (including those as a result of climate change) such as windstorms and hurricanes.

During 2021 and 2022, we experienced significant price volatility in various chemicals we rely upon as a result of weather events in the southeastern U.S.

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We operate capital-intensive businesses and require substantial capital for ongoing maintenance, repair and replacement of existing facilities and equipment.

Although we endeavor to maintain our production equipment with regular scheduled maintenance, key pieces of equipment and systems, some of which are large in scale, may need to be repaired or replaced periodically.

Although we endeavor to maintain our production equipment with regularly scheduled maintenance, key pieces of equipment and systems, some of which are large in scale, may need to be repaired or replaced periodically.

The costs of repairing or replacing such equipment and the associated downtime of the affected production line could adversely affect our financial condition and results of operations.

In addition, new or existing environmental regulations at times require additional capital expenditures for compliance.

In addition, new or existing environmental regulations sometimes require additional capital expenditures for compliance.

We believe our capital resources are currently adequate to meet our projected operating needs, capital expenditures and other cash requirements.

However, our inability to provide for our operating cash requirements on reasonable economic terms could materially adversely affect our business, financial condition and results of operations.

We face substantial asset risk, including the potential for impairment related to our long-lived assets and the potential impact to the value of recorded deferred tax assets.

We have major manufacturing operations in the U.S., Canada and France that are conducted through four production facilities.

We face risks to our assets, including the potential for substantial impairment of our long-lived assets.

We have major manufacturing operations in the U.S., Canada and France, which are conducted through four production facilities.

Our ability to generate sufficient cash flows to fully recover the carrying value of our assets depends on the successful execution of our strategies and may be materially adversely impacted by a significant change in business climate, disruptions in the global economy, unanticipated competition or other causes of a material decline in demand, an adverse action or assessment by a regulator, significant disposal activity, by sale or otherwise, or a material change in how we manage our assets, among other things.

If any such events or circumstances arise and it is determined that sufficient future cash flows do not exist to support the current carrying value, we will be required to record an impairment charge for our long-lived assets or write-off of recognized DTAs.

If any such events or circumstances arise and it is determined that sufficient future cash flows do not exist to support the current carrying value, we would be required to record an impairment charge for our long-lived assets.

In the third quarter of 2024, in conjunction with the indefinite suspension of Temiscaming High Purity Cellulose operations, we recorded a non-cash asset impairment of $25 million.

In the fourth quarter of 2023, in conjunction with the optimization and realignment of our High Purity Cellulose assets, we recorded a non-cash impairment of $62 million related to certain assets at the Temiscaming and Jesup facilities.

See Note 7—Property, Plant and Equipment, Net for further details of this impairment.

See Note 3—Indefinite Suspension of Operations and Note 8—Property, Plant and Equipment, Net for further details of these impairments.

We may be required to recognize a significant non-cash charge to earnings if our recorded deferred tax assets are deemed unrealizable.

Our financial statements reflect net DTAs, which assume that we will generate sufficient taxable income in the applicable tax jurisdictions to realize the benefit of those net DTAs.

If we are unable to generate sufficient taxable income, we may be required to record a valuation allowance against these DTAs.

GAAP requires that certain evidence be given heavy consideration, including whether we have incurred cumulative income or losses in recent years.

If we incur adjusted losses in certain jurisdictions over this period, generally considered three years, we could be required to derecognize a material balance of DTAs, which would adversely affect our results of operations.

The vast majority of our DTAs are in Canada, with $334 million of net DTAs recognized on the consolidated balance sheets as of December 31, 2024.

We depend on third parties for transportation services and unfavorable changes in the cost and availability of transportation could materially adversely affect our business.

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Failure to maintain satisfactory labor relations could have a material adverse effect on our business.

As of December 31, 2023, 61 percent of our global work force was unionized.

As of December 31, 2024, 69 percent of our global workforce was unionized.

We are required to negotiate the wages, benefits and other terms of employment with these employees collectively.

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While we do not expect any labor interruptions of significant duration, if our unionized employees were to engage in a strike or other work stoppage, such as the short-duration walk-outs in 2019 and 2021 at our plant in Tartas, France, at one or more of our major facilities, we could experience a significant disruption of our operations, which could materially adversely affect our business, financial condition and results of operations.

We are dependent upon attracting and retaining key personnel, the loss of whom could materially adversely affect our business.

We believe our success depends, to a significant extent, upon our ability to attract and retain key senior management and operations management personnel.

Changing demographics and labor work force trends may result in the loss of knowledge and skills as experienced workers retire.

We depend on attracting and retaining key personnel, the loss of whom could materially adversely affect our business.

We believe our success depends significantly on our ability to attract and retain key senior management and operations management personnel.

Changing demographics and labor workforce trends may result in the loss of knowledge and skills as experienced workers retire.

Furthermore, some of our facilities are in relatively remote locations, which can challenge our ability to recruit and retain employees.

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Our failure to develop and retain key personnel and recruit and develop qualified replacements for retiring and other departing employees could materially adversely affect our business, financial condition and results of operations, as well as our ability to succeed in our human capital goals and priorities.

Failure to develop new products or discover new applications for our existing products, or our inability to protect the intellectual property underlying new products or applications, could have a material adverse impact on our business.

We have an active R&D program to develop new products and applications for our existing products.

However, there can be no assurance this program will be successful, either from a product development or commercialization perspective, or that any particular invention, product or development, or the program as a whole, will lead to significant revenue or profit generation.

Failure to meet our customers’ needs through the development of new products or the discovery of new applications for our existing products, or our inability to protect the intellectual property underlying new products or applications, could have a material adverse impact on our business.

The industries and end markets into which we sell our products experience technological change and product improvement.

Manufacturers may introduce new products or require new technological capacity to develop customized products.

Our future growth depends on our ability to gauge the direction of our customers’ commercial and technological progress in the key end markets into which we sell our products and to then successfully develop, manufacture and sell products in these end markets.

We have an active R&D program to develop new products and new applications for our existing products.

Moreover, some of our new products and applications may not contain intellectual property that can be protected under intellectual property laws.

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Loss of our intellectual property and sensitive data or disruption of our manufacturing operations due to a cybersecurity incident could materially adversely impact our business.

Like most companies, we have been, and expect to continue to be, subject to attempted cyber intrusions.

One form of intrusion that has become increasingly prevalent is the practice of cyber extortion, particularly through the use of ransomware.

The sophistication of cyber intrusions continues to grow, and the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes increases the risk of cyber security incidents.

Like most companies, we have been, and expect to continue to be, subject to cybersecurity threats, including attempted cyber intrusions.

One form of attempted cyber intrusion that has become increasingly prevalent is the practice of cyber extortion, particularly through the use of ransomware.

The sophistication of cybersecurity threats continues to grow, and the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes increases the risk of cybersecurity incidents.

Cyber intrusions targeting our business systems, operational tools and external vendor software could compromise our intellectual property and confidential business data, cause a disruption to our operations or damage our reputation.

To address these challenges, we use advanced detection systems and artificial intelligence-driven threat mitigation tools.

Functions that serve an important role in the efficient operation of our business include purchasing and fulfillment, inventory and manufacturing process management, the reporting of financial results and various other business process support.

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These measures are in place to safeguard against, detect and manage cybersecurity risks across our processes, including those associated with our third-party service providers, on whom we rely to maintain security programs that align with their respective risks.

While we have not experienced any material information security breaches within the periods being reported (or to the best of our knowledge, any material information security breach prior to that), there can be no assurance that our third party service providers’ security efforts and programs will be successful and/or that a successful cybersecurity incident will not otherwise occur in the future.

While we have not experienced any material information systems security breaches within the periods being reported (or, to the best of our knowledge, any material information systems security breach prior to that), there can be no assurance that our or our third-party service providers’ security efforts and programs will be successful and/or that a material cybersecurity incident will not occur in the future.

Such an event could have a material adverse impact on our financial condition and results of operations.

Challenges and uncertainties in executing our Biomaterials strategy may adversely impact our business and financial results.

The successful execution of our biomaterials strategy is subject to a number of potential challenges and uncertainties.

Certain regulatory approvals may be required in connection with the expansion of our biomaterials business and its underlying projects.

Denial or delay of such approvals or changes in requirements could impact our ability to commercialize these products as planned.

For example, we are in the process of formally appealing a denial of a permit to construct a proposed bioethanol plant within the boundary of our Fernandina Beach, Florida, facility.

Market viability of our biomaterials products depends on various factors including demand for renewable alternatives, customer acceptance, and the economic viability of our products relative to fossil-fuel-based options.

If demand does not develop as expected, or if regulatory incentives or sustainability priorities change or decline, our ability to generate expected returns could be adversely affected.

Additionally, competition from other bio-based technologies or synthetic alternatives could limit our ability to capture market share.

Our ability to fund the growth of our biomaterials business depends on meeting financial and operational targets that align with investor and lender expectations.

For example, our ability to secure future funding under existing funding agreements is subject to key project milestones, conditions, and thresholds, and the failure to achieve these could delay access to capital, require us to seek alternative financing on less favorable terms, or limit our ability to proceed with planned investments in biomaterials production.

Failure to successfully navigate these and related challenges impacting our biomaterials strategy could adversely affect our ability to generate expected returns and fully realize the strategy’s long-term growth potential.

Regulatory and Environmental Risks

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These laws, regulations and permits, now and in the future, may materially adversely restrict our current production, limit our ability to increase production and impose significant costs on our operations with respect to environmental compliance.

We expect that compliance-related capital expenditures and operating costs will likely increase over time as environmental laws, regulations and permit conditions become more strict, and as the expectations of the communities in which we operate become more demanding.

Environmental laws, regulations and permits are constantly changing and are generally becoming more restrictive.

We expect compliance-related capital expenditures and operating costs to likely increase over time as environmental laws, regulations and permit conditions become more strict and as the expectations of the communities in which we operate become more demanding.

Environmental laws, regulations and permits are constantly changing and may become more restrictive.

Laws, regulations, permits and related judicial decisions and administrative interpretations affecting our business are subject to change, and new laws and regulations are frequently enacted.

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Over time, the complexity and restrictions imposed by these laws and regulations have increased and regulatory enforcement efforts have intensified.

Environmental regulatory authorities have pursued a number of initiatives which, if implemented, could impose additional obligations and constraints on our operations, especially in the area of air emissions, wastewater and storm water control.

Environmental regulatory authorities have pursued several initiatives that, if implemented, could impose additional obligations and constraints on our operations, especially in air emissions, wastewater and stormwater control.

See Item 1—Business—Environmental Matters of this 2024 Form 10-K for further information.

Environmental laws and regulations will likely continue to become more restrictive and over time could materially adversely affect our business, financial condition and results of operations.

Environmental laws and regulations may continue to become more restrictive and over time could materially adversely affect our business, financial condition and results of operations.

Environmental groups, Indigenous communities and interested individuals may seek to delay or prevent a variety of our operations .

We expect that environmental groups, Indigenous communities and interested individuals will intervene with increasing frequency in the regulatory processes in areas where we operate.

Generally, environmental permitting programs in all areas where we operate include provisions for public and stakeholder engagement for both renewal of existing permits and approvals for expansions or modifications of our manufacturing operations.

Generally, environmental permitting programs in all areas where we operate include provisions for public and stakeholder engagement for both renewal of existing permits and approval for expansions or modifications of our manufacturing operations.

In Canada, direct consultation with Indigenous communities may also be required.

Delays, restrictions and increased costs caused by the intervention of these groups or interested individuals could adversely affect our operating results.

In addition to intervention in permit proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans.

For example, in March 2014, litigation was commenced in federal court by the Altamaha Riverkeeper alleging violations of federal and state environmental laws relating to permitted wastewater discharges from our plant in Jesup, Georgia (although it was dismissed by the court on summary judgment in 2015), and in January of 2016 the same group brought an action against the Georgia EPD in opposition to the Georgia EPD’s issuance of a renewed wastewater treatment permit for our Jesup plant.

In addition to intervening in permit proceedings, interested groups and individuals may file or threaten to file lawsuits that seek to prevent us from obtaining permits, implementing capital improvements or pursuing operating plans.

For example, in March 2014, litigation was commenced in federal court by the Altamaha Riverkeeper alleging violations of federal and state environmental laws relating to permitted wastewater discharges from our plant in Jesup, Georgia (although it was dismissed by the court on summary judgment in 2015), and in January 2016, the same group brought an action against the Georgia EPD in opposition to the Georgia EPD’s issuance of a renewed wastewater treatment permit for our Jesup plant.

While these proceedings have, to date, been decided largely in our favor, we expect similar attempts at legal intervention to be made in the future.

We currently own and may acquire properties that require environmental remediation or otherwise are subject to environmental and other liabilities.

We currently own, and may acquire in the future, properties which are subject to environmental liabilities, such as remediation of soil, sediment and groundwater contamination and other liabilities.

We currently own, and may acquire in the future, properties that are subject to environmental liabilities, such as remediation of soil, sediment and groundwater contamination and other liabilities.

In addition, we may have such liabilities at properties, such as formerly operated manufacturing facilities, that we no longer own.

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See Item 1—Business—Environmental Matters and Note 11—Environmental Liabilities to our Financial Statements for additional information.

The potential longer-term impacts of climate-related risks remain uncertain at this time.

Climate change and its impacts on people and our planet continue to be a topic of significant focus and attention of our customers, investors and various other stakeholders.

The potential long-term impact of climate-related risks remain uncertain at this time.

Climate change and its impact on people and our planet continue to be a topic of significant focus and attention of our customers, investors and various other stakeholders.

We can give no assurance that climate-related issues or associated expenditures will not exceed current expectations and increase in future years.

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The federal government of Canada has adopted the Greenhouse Gas Pollution Pricing Act, which implements the federal carbon pollution pricing system.

Under the provisions of the Greenhouse Gas Pollution Pricing Act, the provinces, who have previously implemented their own carbon pollution price, or “cap-and-trade” system, will not be subject to the federal program provided their program meets the minimum federal pricing and emissions reduction targets.

Under the provisions of the Greenhouse Gas Pollution Pricing Act, the provinces that have previously implemented their own carbon pollution price, or “cap-and-trade” system, will not be subject to the federal program provided their program meets the minimum federal pricing and emissions reduction targets.

Quebec has a cap-and-trade program for GHGs that meets the minimum criteria, and our Temiscaming, Quebec plant was a net purchaser of credits under this program in 2024.

To date, the cost of GHG credits under cap-and-trade programs purchased by our business and incorporated into the overall cost of our purchased wood fiber has not been material, although no assurances can be given that they will not substantially increase in the future, as the future regulatory state and the cost of GHG credits in applicable jurisdictions is currently unknown.

To date, the cost of GHG credits under cap-and-trade programs purchased by our business and incorporated into the overall cost of our purchased wood fiber has not been material.

However, no assurances can be given that they will not substantially increase in the future, as the future regulatory state and the cost of GHG credits in applicable jurisdictions is currently unknown.

As regulators increasingly focus on climate change and other sustainability issues, we have and may become subject to new disclosure frameworks and regulations.

In January 2023, the European Commission issued the Corporate Sustainability Reporting Directive, which we believe will apply to RYAM’s business, that requires expansive disclosure on various sustainability topics, including climate change, biodiversity, workforce, supply chain and business ethics.

The State of California has also recently issued new climate change disclosure requirements for certain entities conducting business in California and the SEC is expected to finalize its proposed rule on climate change disclosures in 2024.

The State of California has also issued new climate change disclosure requirements for certain entities conducting business in California and the SEC finalized a new rule on climate change disclosures in 2024.

Although the SEC issued an order staying the new rule in April 2024 pending ongoing litigation challenging the rule, we are evaluating the impact this rule will have on our disclosures if it becomes effective.

Our compliance with such rulemakings may require significant increased effort and costs.

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Transition risks associated with climate change.

The transition to a low carbon economy, as predicted by many investors and other stakeholders, poses both risk and opportunity for us that are, as yet, not able to be quantified.

The transition to a low carbon economy, as predicted by many investors and other stakeholders, poses both risk and opportunity for us that are, as yet, unable to be quantified.

Similar to other manufacturers in our industry, we use biomass, natural gas, liquid fossil fuels and purchased electricity to power our plants.

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The primary input of all our products is wood — a renewable, natural raw material.

Further, our cellulose specialty products are natural polymers that can be used as an effective, more climate-friendly substitute for certain applications that currently use fossil fuel-based products.

Further, our cellulose specialties products are natural polymers that can be used as an effective, more climate-friendly substitute for certain applications that currently use fossil fuel-based products.

We continue to explore additional climate-friendly applications for existing products and pursue projects to develop new sustainable products from renewable resources, including our operational 2G bioethanol facility in France, our planned bioethanol plant at Fernandina Beach and our involvement in AGE, a start-up entity seeking to generate green electricity using renewable forestry and other biomass waste.

However, these opportunities, as well as their attendant risks, are not fully known or understood at this time.

Physical risks associated with climate change.

The potential impacts of extreme weather, such as hurricanes, blizzards, and heavy rain, which could result from the impacts of climate change, are factored into our enterprise risk assessment process and the mitigation measures we currently take to protect our assets and business.

It is not clear whether increased frequency of these or similar events would materially change our risk profile, analyses or mitigation measures, but there can be no assurance that they would not require additional material expenditures.

The potential impacts of extreme weather, such as hurricanes, blizzards, wildfires and heavy rain, that could result from the impacts of climate change, are factored into our enterprise risk assessment process and the mitigation measures we currently take to protect our assets and business.

It is not clear whether an increased frequency of these or similar events would materially change our risk profile, analyses or mitigation measures, but there can be no assurance that they would not require additional material expenditures.

In sum, additional business and regulatory initiatives may be implemented to address GHG emissions and other climate change-related concerns.

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We have a qualified non-contributory defined benefit pension plan, which covers many of our salaried and hourly employees in the U.S.

The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each of these benefit plans.

The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each benefit plan.

pension plans, while currently adequately funded, will also require periodic contributions to ensure that applicable legal requirements are met.

Because it is unknown what interest rates and the investment return on pension assets will be in future years, no assurances can be given that applicable law will not require us to make future material plan contributions.

In addition, it is possible that new accounting rules and/or changes to actuarial requirements may also result in the need for additional contributions to the plans.

In addition, new accounting rules and/or changes to actuarial requirements may also result in the need for additional contributions to the plans.

Any such contributions could materially adversely affect our financial condition.

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As of December 31, 2024, our total indebtedness was $730 million.

This significant amount of debt could have material adverse consequences to us and our investors, including:

This significant amount of debt could have material adverse consequences for us and our investors, including:

• requiring a substantial portion of our cash flows from operations to be used for interest payments on this debt;

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• increasing our vulnerability to general adverse economic and industry conditions;

• reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business;

• reducing the cash flows available to fund capital expenditures and other corporate purposes and grow our business;

• limiting our flexibility in planning for, or reacting to, market or other changes in our businesses and industry;

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• limiting access to liquidity, including through our asset-based revolving credit facility.

To the extent we incur additional indebtedness, the risks described above could increase.

The risks described above could increase to the extent we incur additional indebtedness.

In addition, our actual cash requirements in the future may be greater than expected.

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Our debt agreements contain various covenants that limit our ability to take certain specified actions, including incurring debt or liens, making investments, entering into mergers, consolidations and acquisitions, paying dividends and making other restricted payments.

Our Credit Facility and 2027 Term Loan are also subject to financial covenant requirements.

If we anticipate non-compliance with these financial covenants, we may take actions to maintain compliance with them, including reductions in our general and administrative expenses and capital expenditures.

Our ABL Credit Facility and 2029 Term Loan are also subject to financial covenant requirements.

If we anticipate non-compliance with these financial covenants, we may take action to maintain compliance with them, including reducing our general and administrative expenses and capital expenditures.

The breach of any of the covenants under any of our debt agreements could result in a default under the agreement, which could cause indebtedness under the agreement to become due and payable.

If the repayment obligation under a debt agreement is accelerated, we may not be able to repay the debt or refinance the debt on acceptable terms and our financial position would be materially adversely affected.

In January 2024, we amended our 2027 Term Loan agreement to increase the maximum consolidated secured net leverage ratio that we must maintain through our 2024 fiscal year to address the risk of potential noncompliance with the covenant as of the end of the fourth quarter of 2023.

Though we are in compliance with all covenants and other terms of the 2027 Term Loan, as amended, as of December 31, 2023, there can be no assurance given of future compliance or that additional amendments to the credit facilities will not be necessary.

Challenges in the commercial and credit environments may materially adversely affect our future access to capital.

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We may require additional financing in the future to meet our capital needs or to make acquisitions, and such financing may not be available on favorable terms, if at all, and may be dilutive to existing stockholders.

We may require additional financing in the future for general corporate purposes, such as to increase our investment in R&D activities, make strategic investments in our facilities, invest in joint ventures or make acquisitions.

We may require additional financing in the future for general corporate purposes, such as increasing our investment in R&D activities, making strategic investments in our facilities, investing in joint ventures or making acquisitions.

We may be unable to obtain desired additional financing on terms favorable to us, if at all.

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Our stockholders’ ownership in RYAM may be diluted.

In the future, stockholder ownership in RYAM may be diluted as the result of equity issuances for acquisitions, capital market transactions and other corporate purposes, including equity awards for our directors, officers and employees.

Additionally, our employees have options to purchase shares of our common stock.

We anticipate that our compensation committee will continue to grant stock options or other stock-based awards to our employees under our employee benefit plans.

In the future, stockholder ownership in RYAM may be diluted due to equity issuances for acquisitions, capital market transactions and other corporate purposes, including equity awards for our directors, officers and employees.

We anticipate that our compensation committee will continue to grant stock-based awards to our employees under our employee benefit plans.

Such awards and other issuances would have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.

Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, could prevent or delay an acquisition of RYAM, which could decrease the price of our common stock.

Certain provisions in our amended and restated certificate of incorporation and bylaws, as well as Delaware law, could prevent or delay an acquisition of RYAM, which could decrease the price of our common stock.

Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our Board of Directors generally may determine.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors